The Nigerian National Petroleum Company Ltd(NNPC Ltd) has won a court injunction restraining ExxonMobil Corporation from selling its entire shallow water assets in Nigeria due to “overriding national interest”, this was confirmed in a statement by Seplat Energy Plc.
Edith Onwuchekwa, company secretary at Seplat, in the statement released on Monday, said an Abuja high court had granted the NNPC an “order of interim injunction” restraining ExxonMobil “from completing any divestment” in Oil Mining Lease(OML) 68, 69, 70 and 104.
Mobil Development Nigeria and Mobil Exploration Nigeria’s equity ownership of Mobil Producing Nigeria Unlimited, translated to a 40 per cent stake in four oil mining licenses. The four includes more than 90 shallow-water and onshore platforms and 300 producing wells.
Recall that in February 2021, Seplat Energy Plc agreed to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil for $1.3 billion.
In May, the Federal Government declined to consent to the proposed acquisition due to “overriding national interest”.
The NNPC Ltd had made several attempts to block the sales deal by exercising its right of pre-emption on ExxonMobil’s planned sale of the MPNU assets in Nigeria and to take over the ownership of some divesting partnerships.
Seplat Energy however noted that despite the court injunction its deal with ExxonMobil was valid and subsisting.
The statement added that the court barred MPNU and Mobil Development Nigeria Plc from disposing of their shares in the joint operating agreement (JOA) between them and the NNPC.
Onwuchekwa said, “Seplat Energy PLC recently became aware that, on 5 July 2022, the Nigerian National Petroleum Company Limited (“NNPC”) commenced an action at the State High Court of the Federal Capital Territory in Abuja, Nigeria (“State High Court”) in relation to the acquisition of the entire shares of Mobil Producing Nigeria Unlimited (“MPNU”).
“MPNU, its shareholders (Mobil Development Nigeria, Inc. and Mobil Exploration Nigeria, Inc.), and the Nigerian Upstream Petroleum Regulatory Commission are named as defendants in the suit.
“NNPC has requested the State High Court to declare that a dispute has occurred between itself and MPNU in relation to the interpretation of pre-emption rights under their Joint Operating Agreement (“JOA”) and order NNPC and MPNU to arbitration as required by the JOA.
“On 6 July 2022, the State High Court made an ex parte order of interim injunction restraining the Defendants from completing any divestment in MPNU, including the Share Sale and Purchase Agreement signed with Seplat Energy Offshore Limited (the “SPA”).”
Seplat Energy, which is not a party to the lawsuit, reiterated that the deal is still valid and subsisting, and the “company remains confident that the matter will be brought to a proper conclusion in accordance with the law. Any further information will be provided if available to the Company and permitted by law”.
0Mele Kyari, Group Managing Director(GMD) NNPC had few months ago, written a letter to ExxonMobil to fault the Seplat deal, insisting that the Corporation, as the principal partner in the joint venture, was not given the opportunity to buy over the asset.
Kyari in his letter noted the Corporation, as a Senior Partner in the NNPC/Mobil JV, must have been given the pre-emptive right of first refusal to acquire the MPNU’s interests before the decision to sell the share to Seplat.
The GMD NNPC said that the company was more than ready to fully match the offer of the winning bid in line with the terms of the joint venture operating agreement. This according to him was part of its commitment to focus on building its portfolio towards its long-term profitability as a corporate company.
He said, “In pursuant to the Corporation’s aspiration to build its portfolio, NNPC, in January sealed a $5billion corporate finance deal with the African Export-Import Bank (Afreximbank), its first finance deal post-PIA and its incorporation into a limited liability company.
“Under the financing deal, Afreximbank agreed to provide financial advisory services and fundraising for $5billion to NNPC to “acquire, invest and operate energy producing assets in Nigeria as part of NNPC’s growth strategy. ”
EnergyDay gathered that Afreximbank, agreed to underwrite $1billion as part of forward sales base trade finance transaction in respect of the deal.
This is meant to give the NNPC opportunity to finance some of its major investments in the country’s upstream oil and gas sector and to take over the ownership of some divesting partnerships.